Mainland media praise for ChiNext start-up board may be misplaced
ChiNext-listed firms reported total earnings of 60 billion yuan in 2015, just 2.4 per cent of the combined profits of all A-share companies
China’s state-owned media have begun to publish upbeat commentaries about the start-up board at the Shenzhen Stock Exchange ahead of its seventh anniversary.
China Securities Journal, to cite just one recent example, said that the firms listed on the ChiNext exchange “maintained high growth momentum despite complex economic conditions,” while the start-up board helped cultivate a spirit of enterprise and innovation that paves the way for further economic reforms.
But that kind of feel-good rhetoric is misplaced. The ChiNext market has fallen short of its early promise and contributed little to the world’s second-largest economy.
After almost a decade of preparation, Beijing launched the ChiNext on October 30, 2009, when 28 start-up firms made their trading debuts.
At that time, the mainland’s media touted it as a cradle for innovation that would lead to the creation of the country’s own equivalents of Microsoft and Cisco, where thousands of prospective technology start-ups could access much-needed funds to enable expansion.
The state-owned media are now highlighting the capitalisation of the ChiNext market, which has swelled to 5.49 trillion yuan, as proof that technological innovation has become a driving force for the domestic economy.